Logistical Challenges

Following her time with John Lewis and Amazon, there’s not much that Sally Duggleby doesn’t know about retail logistics. With a new role at Savills, she’s now looking to provide occupiers with the same level of service she expected as a client.

Sally Duggleby’s LinkedIn biography makes impressive reading. After a stint at King Sturge (before it was swallowed up by JLL) she joined industrial property giant, Brixton (which subsequently became part of SEGRO) as an Asset Manager, and then did two years with John Lewis before being appointed Amazon UK’s Head of Real Estate.

During her seven-year tenure with the online giant, she oversaw the tenfold expansion of its UK estate. Her smallest project was a 2,000 sq ft photo studio and her largest was the 2.2m sq ft Amazon ‘mega-shed’ at Tilbury.

So by this time last year, it was fair to say that Sally had seen the industrial & logistics sector from pretty much every perspective. What she’d also seen is that the quality of occupier advisory service is, as she diplomatically puts it, ‘uneven’.

Duggleby recalls: “I had got to the point where I’d been wondering what my next challenge could look like. I was also becoming increasingly frustrated about the level of occupier representation available in the market. Generally it wasn’t at a technical level I could trust or could help me to scale the portfolio quickly “The idea formed to provide a dedicated consultancy service purely to help occupiers either acquire, dispose or manage their property in an outsourced and targeted way, that also allows them to flex with their business as it grows and develops.”

The result was her appointment to a specially created role of National Head of Industrial and Logistics Occupier Services at Savills. Seven months in and Duggleby is relishing the role: “I really enjoy working with a broad spectrum of occupiers, including everything from data centre providers to retailers, manufacturers, parcel carriers and even a winemaker, so no two days or projects are the same.

The logistics property sector is undoubtedly the hottest in the business at present. Occupier demand is growing at an almost exponential rate while rents steadily rise and the sectors’ prime investment yields continue to harden.

Duggleby believes there is still tremendous momentum in the market.

“Looking at projections regarding the volume of parcel deliveries, you get a feel for the level of future demand. In 2016, around 2.8bn parcels were delivered across the UK and that’s expected to increase to 4bn by 2021. And that’s just parcels.

“Savills research shows that the base of different occupier types continues to grow within industrial and logistics. The demand is definitely still there, the market is buoyant and occupiers’ needs are evolving. Sophisticated developers have understood that and are beginning to integrate design changes within their space which is very encouraging to see.”

If there is no prospect of demand waning, the next challenge is satisfying it. Millions of square feet of industrial and warehouse space in urban locations have been lost to residential development and the trend is continuing as the country scrambles to meet its housing needs. This presents challenges for satisfying requirements for last mile delivery space in urban locations, ultimately driving the need for creative solutions.

Some developers are looking at multi-storey facilities to increase the use intensity of their sites. Duggleby believes that this type of development can play an important role.

“Multi-storey warehousing will have a massive part to play in densely populated high land value areas in the UK. You only have to look at the way they’ve been able to be deployed in Asia to understand its success. But it’s important that developers get it right and make it easy for occupiers to see the advantages.

“Mixed-use schemes combining commercial and residential elements can also play a part in countering the amount of warehousing land being lost to residential use. As more and more postal addresses are created, more deliveries to front doors are required, whether it’s a parcel or take-out food. Those kind of businesses need commercial space nearby.”

Ultimately, Duggleby’s experience means she can provide ‘end to end’ consultancy advice and be there for an occupier at every stage of the property journey, merging seamlessly with their in house teams.

This may involve leading strategic vision and thought leadership ahead of a project, or providing bespoke day to day advice on everything from service charges to property costs throughout. Advice on transport costings can also form a key part of choosing the right location, particularly for global occupiers entering or expanding in the UK for the first time.

“No two occupiers have identical businesses, so really getting under the skin of what each needs to deliver the most successful logistics solution for them is really at the heart of what I do”, says Duggleby.